\u3000\u3 China Vanke Co.Ltd(000002) 895 Guizhou Chanhen Chemical Corporation(002895) )
Event description
On April 16, Guizhou Chanhen Chemical Corporation(002895) released the annual report of 2021 and the first quarterly report of 2022. In 2021, the company achieved an operating revenue of 2.53 billion yuan, an increase of 42.36% year-on-year; The net profit attributable to the parent company was 368 million yuan, a year-on-year increase of 157.88%; The net profit attributable to the parent company after deducting non recurring profits and losses was 343 million yuan, with a year-on-year increase of 201.41%. In 2022q1, the company realized an operating revenue of 609 million yuan, a year-on-year increase of 57.12%; The net profit attributable to the parent company was 104 million yuan, a year-on-year increase of 205.13%; Deduct non net profit of 102 million yuan, an increase of 326.36% year-on-year. At the same time, the company disclosed the plan for non-public offering of shares. The total amount of funds to be raised is no more than 3.53 billion yuan, which will be invested in the comprehensive utilization of low-grade phosphate rock to produce 120000 T / a food grade purified phosphoric acid project, 100000 t / a food grade purified phosphoric acid project, the new 2.5 million T / a mining project of jigongling phosphate mine, replenishing working capital and repaying bank loans.
Maintain a record high operating performance of chemical products
In 2021, the company’s operating performance hit a record high and its profitability increased significantly. The company achieved an operating revenue of 2.53 billion yuan, an increase of 42.36% over the same period last year; The net profit attributable to shareholders of listed companies was 368 million yuan, an increase of 157.88% over the same period last year. In 2022q1, the operating revenue was 609 million yuan, a year-on-year increase of 57.12%; The net profit attributable to the parent company was 104 million yuan, a year-on-year increase of 205.13%. The company’s annual performance hit a record high, mainly because the company’s phosphorus chemical products maintained a high outlook, the output of main products increased steadily, and the product price rose sharply. In 2021, the overall output of the company’s main products was stable, and the sales volume of phosphate rock increased significantly year-on-year. At the same time, due to the imbalance between supply and demand caused by the epidemic and environmental protection measures such as “dual control of energy consumption”, the prices of relevant products increased significantly. In 2021, the company’s output of feed grade calcium dihydrogen phosphate was stable, with an annual output of 323200 tons, a year-on-year decrease of 4.49%. In 2021, the average sales price was 3220 yuan / ton, a year-on-year increase of 40.47%; The output of monoammonium phosphate was 188600 tons, with a year-on-year increase of 3.26%. The average sales price in 2021 was 3501 yuan / ton, with a year-on-year increase of 36.20%; In 2021, the company added phosphorus ore production and sales business, with an output of 2.4649 million tons. In 2021, the average sales price was 284 yuan / ton, an increase of 32.35% year-on-year. The amount of phosphate rock contributed to the performance, and the gross profit margin of the company was significantly improved. After the company acquired Fuquan phosphate mining right and related assets in 2021, the self-use phosphate rock was effectively guaranteed. In addition, the sales unit price of phosphate rock increased, and the gross profit margin of phosphate rock increased significantly year-on-year. In 2021, affected by the epidemic situation and environmental protection policies, the cost of the company’s main products increased sharply. Among them, the gross profit margin of feed grade calcium dihydrogen phosphate was 28.79%, an increase of 0.82 percentage points year-on-year, the gross profit margin of monoammonium phosphate was 26.28%, a decrease of 7.16 percentage points year-on-year, the gross profit margin of phosphate rock production and sales business reached 61.99%, and phosphate rock gradually increased in volume and contributed to performance from 2021, After the phosphate rock was fully self supplied, the production cost of phosphorus chemical products decreased year-on-year, thus offsetting the adverse impact of the rise in the cost of some other products. The gross profit margin of the main products in the whole year reached 28.37%, an increase of 15.28 percentage points over the previous year.
Promote the integrated development mode of mineralization, expand the product structure and become bigger and stronger
The company accelerated the development of upstream phosphate rock resources and promoted the integrated development mode of mineralization. At present, the company owns the mining rights of Xiaoba phosphate rock, Xinqiao phosphate rock and jigongling phosphate rock. The joint-stock company Tianyi mining holds the mining right of LAOHUDONG. The phosphate rock reserves of the four mines are 530641200 tons. In 2021, the company’s phosphate rock mining volume reached 2.4649 million tons. On the one hand, it met the company’s own demand of 1.05 million tons of phosphate rock, reduced the company’s upstream cost, and increased the production and sales business of phosphate ore. in 2021, the company sold 1.05 million tons of phosphate ore, realizing a sales revenue of 309 million yuan. Due to the non renewable resource characteristics of phosphate rock and the impact of national environmental protection policies, the scarcity of phosphate rock resources will gradually appear in the future. After the company has completed the acquisition of mining rights and assets of Xinqiao phosphate rock and jigongling phosphate rock, the phosphate rock production capacity has achieved leapfrog growth, reaching 2.5 million tons / year. The subsequent company will also continue to expand, and the 2.5 million tons / year phosphate rock production capacity of jigongling will be gradually released, The 5 million T / a phosphate rock project of LAOHUDONG phosphate rock is also accelerating the construction.
The company actively extends downstream and expands the structure of phosphorus chemical products. The market demand for calcium dihydrogen phosphate is growing. In 2021, the company has a capacity of 360000 tons / year of calcium dihydrogen phosphate, 150000 tons / year of capacity under construction and 170000 tons / year of monoammonium phosphate. At the same time, the company’s semi water dihydrate wet process phosphoric acid and deep processing project is expected to be completed and put into operation by the end of December 2022, and some construction contents are expected to be gradually put into operation in the second half of 2022. The end products involved in the whole project include 200000 tons / year half water dihydrate wet process phosphoric acid, 100000 tons of food grade purified phosphoric acid, 150000 tons of feed grade calcium dihydrogen phosphate and 659800 tons of building gypsum powder. In addition, the company currently has a sulfur based sulfuric acid production capacity of 200000 tons / year, and the planned sulfuric acid production project of 300000 tons / year pyrite is expected to be completed and put into operation in May 2022. At that time, the company’s industrial chain will be further extended, the cost of phosphorus chemical products is expected to be further reduced, and the product structure will be expanded in the field of phosphorus chemical industry based on the resource advantages of upstream phosphorus ore, which is expected to continue to be bigger and stronger.
It is proposed to raise no more than 3.5 billion yuan to speed up the construction of purified phosphoric acid and mining projects
On April 16, the company issued a plan for non-public offering of a shares. The number of shares to be issued is no more than 100 million, accounting for 20.47% and no more than 30% of the total share capital of the company on March 31, 2022. The total amount of funds raised in this offering does not exceed 3.529 billion yuan, and the net amount after deducting the issuance expenses is proposed to be invested in the following projects: (1) the comprehensive utilization of medium and low-grade phosphate rock to produce 120000 tons / year food grade purified phosphoric acid project, with an investment of 1.295 billion yuan and 1.201 billion yuan to be invested; (2) 100000 t / a food grade purified phosphoric acid project, with an investment of 659 million yuan; (3) Jigongling phosphate mine will build a new 2.5 million T / a mining project with an investment of 1.056 billion yuan and a planned investment of 719 million yuan; (4) Replenish working capital, with a project investment of 200 million yuan and a planned investment of 200 million yuan; (5) Repayment of bank loans, the project investment is 800 million yuan, and 800 million yuan of raised funds is planned to be invested.
After the issuance, the company’s asset scale and net asset scale will increase at the same time, which is expected to further improve the company’s financial strength and provide a strong guarantee for subsequent development; At the same time, the asset liability ratio of the company is expected to be reduced, the business operation of the company will be more stable, and the ability to resist financial risks will be further enhanced.
Accelerate the layout of new energy materials and create the second growth curve in the future
The company actively distributes phosphorus and fluorine new energy materials, and the strategic transformation will bring new profit growth points to the company. The company has determined the strategy of “transformation and upgrading from traditional chemical industry to new energy materials based on resources, centered on circular economy and technology”, and actively layout phosphorus battery cathode materials, including iron phosphate, lithium iron phosphate and fluorine electrolyte materials.
The company, together with Fuquan Municipal People’s government and GuoXuan group, invested 10 billion yuan to build a “mineralization in one” new energy material recycling industry project base. The project is divided into two phases. The first phase of the project is planned to be constructed from March 2021 to March 2024, and the second phase of the project is planned to be constructed from April 2024 to April 2026. After being completed and put into operation, it will form iron phosphate with an annual output of more than 1 million tons, food grade purified phosphoric acid with an annual output of 200000 tons An annual output of 100000 tons of lithium iron phosphate and 40000 tons of lithium hexafluorophosphate for batteries. At the same time, the company, together with Weng’an county and Sunwoda Electronic Co.Ltd(300207) of Guizhou Province, has also planned the “mineralization in one” new energy material recycling industry project. The project is also divided into two phases. The planned construction period of phase I project is from December 2021 to early 2024, and the planned construction period of phase II project is from 2024 to the end of 2025. Among them, the investment of phase I project is about 3.5 billion yuan to build 300000 t / a iron phosphate production line for battery, 200000 t / a food grade purified phosphoric acid production line, 30000 T / a anhydrous hydrogen fluoride production line and supporting device projects; After the completion of phase II phosphoric acid production line with annual production capacity of 0.6 million tons of anhydrous hydrogen and 0.3 million tons of phosphoric acid, iron fluoride production line with annual production capacity of 0.3 million tons of phosphoric acid and 0.3 million tons of anhydrous batteries will be built. The company vigorously develops new energy materials, actively grasps the development opportunities of the new energy materials industry, and constantly enriches the product structure. In the future, it is expected to build new energy materials into the second growth curve and bring new profit increment to the company.
Investment advice
As a Chinese phosphorus chemical enterprise, the company’s performance is expected to continue to grow with the maintenance of the high outlook of the phosphorus chemical industry and the continuous expansion of the company’s product capacity; In addition, the company has started strategic transformation and vigorously distributed new energy materials, the business structure will be continuously improved, and the long-term development of the company will be injected with new power. It is estimated that the company’s net profit attributable to the parent company from 2022 to 2024 will be RMB 798 million, 1.362 billion and 1.872 billion respectively, with a year-on-year growth rate of 117.0%, 70.7% and 37.5%, corresponding to 19, 11 and 8 times of PE respectively. For the first time, give a “buy” rating.
Risk tips
Risk of sharp decline in product price; The risk that the project construction progress is less than expected; The risk that the project approval progress is less than expected; Risk of sharp fluctuations in raw material prices.
